Urbanizing India & Mega Metro Network Vision for the Emerging Cities of India-2030

Study on

November 2011

The Associated Chambers of Commerce and Industry of India

ASSOCHAM corporate office: 1, Community Centre, Zamrudpur, Kailash Colony, New Delhi 110048 Tel +91-11-46550555 (Hunting Line), Fax: 011-46536481/82, 46536498 Email: assocham@nic.in, Website: www.assocham.org

Table of Contents
Urbanizing Cities ............................................................... 1

Metro & the Suburbanization process.............................. 8

Advantages of Metro ......................................................... 9

Urbanization & connecting suburbs via Metro ............. 13

Categorization of Cities & Metro Rail Expansion .......... 15

List of Cities - Tier I, II & III ............................................ 18

Abstract:

4 million), Tier 2 cities population will up to 104 million (1million- 4 million) whereas the Tier 3 cities will have 331 million population (less than 1 million population) respectively. This projection was however based on the earlier census data and later sample surveys. However, the latest data on urbanization from the 2011 census (provisional figures) predict that the urbanization might be faster than what was projected so far. Between 2001 and 2011 the urban population grew from 27.8 per cent of the countrys total population to 31.2 per cent, that is, 3.4 per cent but this is higher than the growth in the previous decennial (1991-2001) of 2.3 per cent(25.5 to 27.8). The number of towns has grown 53.74 per cent to reach 7,935 already that could well mean by 2030 their number could be nearer 10,000 than was envisaged earlier. The urban population is already 377 million and might exceed the earlier projection of 590 million by 2030. Surely this urbanization trend is going to have fundamental impact on the politics, economics and social situation of the country. The most critical issue in urbanization is efficient transport and our study shows that metro rail answers the transit needs of urban areas most effectively and has the potential to bring all round benefits to business, to environment and multiple benefits to people in all walks of life. This study, therefore, urges planned and perceptive metro development in all large cities and steps to find investment for it; any failure to do so, or business as usual approach would worsen urban chaos. In the developing situation with urban India gaining increasingly greater political weight age than ever, such failure would be unacceptable elect orally for the political class and economically for the entire country. The study in this context considers the multiple benefits that have accrued to Delhi even within Phase I and II even as Phase III is under implementation. Metro rail is generating an industry on its own and creating space for new services, jobs and raising social well-being within one of the countrys mega urban conglomerate and the nations capital. ASSOCHAM considers this a role model for all large cities to follow and urges specific steps in this direction.

cenario 2030 projects that the total urban population of India will be 590 million 40% of Indias population, where Tier 1 cities population will go up to 155 million (more than

Type of Urban Cities with Population expected by 2030

Urbanizing Cities Tier I (7 to 13) Tier II(28 to 55) Tier III(70 to 100) Total Population by 2030 (In Million) 155 104 331 590

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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

(Number of cities with a population above one million plus will increase to 70, the first set of numbers of cities as per 2001 census; for a list of cities as per 2011 see end of this paper. In Tier 1 are cities with population above 4 million, tier II between 1 and 4 million and the rest are below 1 million.) (3 CITIES WITH POPULATION ABOVE 20 MILLION AND 10 OTHERS average WITH 5 TO 7 MILLION AVERAGE by 2030). The big story about India is that it is urbanizing rapidly. For ages the saying was that India lives in its villages. But now this has begun to change though the bulk of the population might still remain in villages, the urban content is rising. From some 75 to 80 per cent of the population being in rural areas, the beginning of the Third Millennium (2001) saw a reduction of this to 72 per cent and urban population rising to 28 per cent. The census figures of 2011 reveal that the process of urbanization has accelerated: from an increase from 25.5 to 27.8 per cent of total population in decade ending 2001 to 31.2 per cent in decade ending 2011addition of 48 per cent more than the rate of growth in the previous decade. The number of urban settlements designated as towns of any size has grown from 5161 to 7935 in the decade ending 2011. There is an unmistakable and steady acceleration in the urban-rural ratio in favour of urbanization and reduction in rural population per centage wise though the absolute numbers in rural environment are growing due to total population increase. Table: Urban-rural ratio from decennial to decennial: 1991 2001 2001 2026 2031 25.5: 74:5 27.8 : 72.2 31.2: 68.8 38: 62 (estimated) 40: 60 (estimated)

Population in 2011 1.21 billion Projected in 2031 1.41 billion people However, the absolute size of the rural population will continue to grow despite the fact that since the decennial ending 2011 the number added to urban areas for the first time has exceeded that added to rural areas in the ratio of 90 to 91 million. The absolute size of the rural population in 2011 is 833 million, compared to 742.6 million in 2001 and is likely to get marginally reduced by 2030 to 817 million. The steep per centage rise in urban population should not make us overlook the fact that the rural population would still be huge enough to count both in politics and economics but as the latest NSSO figures reveal the rise in average

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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

urban income would be faster than in rural and the total urban income would continue to be larger than the rural income by a large factor giving urban population far higher weight age in public affairs than is judged by its comparative size. With 590 million urban people in 2030 Indias urban sprawl would become the second largest urban system in the world, the urban population alone becoming larger than total population of several other countries like USA, European Union etc. The growth has already been phenomenal. What were billed as cities with a population above 4 million in 2001 census have already doubled their population by 2008. The still larger metro city growth within the top urban sprawl by 2010 is graphically brought out in the four largest metros : Table: Population projection and critical parameters of four leading metropolitan areas and of mini-metros of India: Population (2001) P0pulation (2031) Mumbai Kolkata 23.62 33 17.25 23 Delhi (NCR) Chennai MR 18 28(?) 8.8 12

In millions; 2031 is a projection Compact index Arterial Rd. density Public transport Use (per cent) Vehicle km/capita Fatality on Rd. Mini Metros (Population now) Bengaluru Hyderabad Car per 1000 persons: Delhi 117; Ahmedabad 50; Bengaluru 50, Chennai 45; Mumbai 25. (For list of cities with population above one million please see page No. 19) Some highlights of this urban growth are very significant and do forecast what we should expect in the next 20 years. The virtual doubling of the population in seven top-most cities is seen in the fact that they have graduated from above four million population to around 8
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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

0.68 0.81

0.78 0.97

0.83 0.72

0.63 1.44

78 11 622

69 7.76 421

62 8.83 2093

43 7.62 629

8.0 (2010) 8.0

Ahmedabad 6.0 (total cities with population above 4 million is 7)

million population already. These cities have become vital engines of growth as they with just 15 per cent of the Indian population contribute 80 per cent of the government tax revenue. The urban population by itself would be the major contributor to the GDP and to government revenues. The rapid growth in the contribution of the urban population to the GDP is evident from the following: Table: Contribution of rural/urban areas to GDP Year 1990 2008 2030 Rural 54 42 31 Urban (per centage of GDP) 46 58 69

(source: Indias Urbanization: McKinsey study)

With urban population reaching 40 per cent of the total population and contributing nearly 70 per cent of the GDP and 85 per cent of the 892 billion USD revenue of the government (as against 80 per cent of the 170 billion USD in 2008), there could be significant shift in both the economics and politics as well as social problems of the country. The proportion of urban voters would increase and therefore urban issues would begin to dominate political agenda and urban-rural mix of the elected representatives. With the number of mega cities that is cities with population of more than four million doubling from 7 to 13 (or 14 estimates differ) some of these mega metros would be larger than the population of several countries. Mumbai Metropolitan Region with 33 million population and GDP of 265 billion USD (in 2008 prices) will have a larger GDP than Portugal is now, and in population equal to Canada. It will be larger than several other countries in either population or GDP or both, like Malaysia, South Africa, UAE etc. The combined urban population of 590 million would surpass the entire population of the European Union and of USA and several other countries except China. This urban growth is also characterized by huge deficiencies in infrastructure and investments needed for their improvement. No Indian city has reached the minimum of 300 USD per capita per annum considered the global average needed for efficient urban infrastructure. Mumbais is the largest but at USD 220 is still below the 367 USD needed. The situation in most other cities is almost pathetic with even Chennai only 51 against 262 USD needed. Huge investment is required. One estimate of total investment needed in the urban sprawl has this data: For cities with 1 to 4 million population For cities with 4 million plus population Rs. 2,17,200 crores Rs. 1,37,680 crores

(not counting the Metro rail investment required)

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The developing urban scenario reveals that: Cities are sprawling Declining public transport Supply side focus needed Multiple institutions cut into one another Huge network inadequacies Low investments Poor enforcement of urban regulations Lack of education of people for urban discipline The table Urban Sprawl 2010 reveals the close relation between better transport and urban economic efficiency. Use of public transport is the highest in Mumbai metropolitan region at 78 per cent mainly because of its decades of efficient but crowded round the clock surface suburban rail system. At the same time Delhi(NCR) that so far was largely using private as well as public transport (public transport density 62 per cent with only a short metro) has the highest road fatalities rate of 2093. It also has the highest vehicle km per capita at 8.83. Delhi has the highest car per 1000 persons at 117 with Mumbai having the lowest. Though this is not conclusive it could be inferred that larger the rail transport in urban spread and lower the car per 1000 persons( good public transport, especially rapid rail transport), the fatalities rate would be significantly lower. In fact the graph of fatalities on road accidents in Delhi show that significant fall from the level of 2400 deaths began with year 2000 and the fall rose further when the first phase of Metro began to take effect though since 2005 there was increase once again due to rising road congestion. Of course, along with Metro, Delhi also had a number of flyovers covering most of key traffic junctions that also brought down congestion in the last two years.

Overall Investment perspective

Studies in different urban structural scenario show that rail rapid transit will have the largest share of city transport investments in cities with population above 4 million. Table: Ideal position of rail rapid transit per centage: Size >10 Mill 4to10 M 1to4 M 05 to1M <0.5 M

Dispersed cities focused on road rail infrastructure % of rapid rail network 60 60 20 0 0

Relatively compact cities with complete network % of rapid rail network 50 50

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20

Compact cities with complete and well planned network % of rapid rail network 50 50 0 0 0

This study by the Ministry of Urban Development also shows that urban transport investment requirements under these three scenarios mentions Rs. 21,298 crores, Rs 15,926 crores and Rs 12,267 crores as the total investment requirement for transport in the three different scenarios in 1995 prices(without specifying city size). Dispersed cities require more investment for longer length of roads and rail tracks and other networks. Rail transit will have largest part of city investment requirement among different items of requirement in all large cities, apart from investment in street infrastructure: Under scene 1 Under scene 2 Under scene 3 29.3 per cent 24.4 % 13.1 %

It is also obvious that the pressure of urbanization with large scale migration of rural population into the urban areas in search of jobs, better educational and health opportunities, and out of the demonstration effect of cities, it would be very difficult politically and otherwise to restrict city expansion. The emergence of dispersed cities is thus inevitable in most cases though with some forward planning the surge from the rural areas could be directed in specific areas of settlement. For instance, Delhi has expanded on all sides with NOIDA and Greater NOIDA in the east and Gurgaon in the West becoming satellite cities integrated into Delhi in many ways. Mumbais expansion has spilled over and an entirely new city Navi Mumbai is coming up attached to it. The story is the same in all other metros and mini metros. At the centre of each of these megacities the metro rail lines are, in the coming 20 years, destined to become the focal point of transit growth and network infrastructure. With the most recent data from the 2001 census revealing accelerated urbanization, there is no escape from the rural migration to urban cities, more so to the seven mega cities with populations more than or reaching eight million. The big challenge for urban planners is to cope with the seven mega cities with a population about 20 per cent of the country demanding 40 per cent of investments projected. The investment in rapid rail transport for urban areas has many benefits other than merely improving by a large factor the efficient movement of people within the Metropolitan region. Studies in green house gas emission in urban areas undertaken by the Urban Development Ministry at various stages have focused on this benefit among others.

Reduction in pollution
A comparison of green house gas emissions estimated for different types of transport modes throws up Metro rail as the least polluting among various vehicular traffic.
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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

Table: Greenhouse gas emissions from vehicles and transport modes in developing countries: Mode Car (gasoline) Car (diesel) Car (natural gas) Car (electric) Scooter (two stroke) Scooter (four stroke) Bus (diesel) Bus (natural gas) Rail transit (electric) Aviation
(source: IIT Madras)

Load factor (average occupancy) 2.5 2.5 2.5 2 1.5 1.5 40 40 75% 75%

CO2 emissions (gms/ passenger Kms) 130-170 85-170 100-125 30-100 60-90 40-60 20-30 25-35 20-50 350-500

Fuel consumption and Investment requirements

An Urban Development Ministry study shows that public transport share at 75 per cent till 2031 will reduce fuel demand by 100 million ton oil equivalent to 42 per cent. Actual investment requirements have been estimated at over four lakh crores for urban transport development in 87 cities but these estimates could at best be considered rough and as we see the four mega cities themselves are asking for over Rs 1 lakh in Metro investments each in the coming years. Going by the Delhi Metro estimates the financial internal rate of return on investments have been pegged at 17 per cent but these estimates should be raised by 1.4 per centage points when benefits like reduction of urban air pollution are considered.

Metro rail in Delhi: inspiration for future urban transit

The transformation of public transport in the National Capital sets a sustainable though capital intensive model for dealing with rapidly growing urbanization of the emerging India in this and the next two decades. Partly under the pressure of international events and partly under the rapidly evolving global recognition of India as an emerging power considerable resources have been concentrated in planned urban transport in Delhi and NCR to take care of the explosive growth of the national capital region (NCR). For instance, two ring roads have been made completely traffic crossings free through flyovers and underpasses at strategic

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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

points. The old pattern of buses has been largely replaced by the modern low floor buses both air-conditioned and non-AC with a distinct colour scheme for easy identification. The bus stands wear a streamlined look and soon will have GPS enabled real time information system. Widened roads enable more public and private vehicle transport to move faster and with fewer chances of traffic hold ups. Bus route corridor in arterial roads has been introduced to speed up bus transport. The goods trucks passing through the city have been diverted and forced to move only during low traffic timings and the peripheral bypasses under construction are expected to completely divert them away from the city centre. Apart from local resources Central grants under JNNURM (Jawaharlal Nehru National Urban Renewal Mission) and private sector and foreign government investments have been the main funding sources for this transformation. What is most significant and critical in this transformation as ASSOCHAM and its member industry and business concerns see it has been the Delhi Metro Project. This metro set up without much time overruns, have sent a message to all states in the country with large metropolis in them to go in for similar metro projects there too. The Delhi metro project as of now comprises a network of 186.72 kms. This includes an Airport to New Delhi metro line (Airport express line) that takes just 21 minutes to transport people over this length that by road should even after the construction of the series of elevated roads and flyovers an hour. More metro lines are under construction/sanction that would within the next five years enable all points in the NCR reached by metro rail very fast and free of traffic hold ups. That this has changed the transportation set up and even socio-economic culture is the additional benefit of the metro apart from the energy saving when lakhs of commuters give up motorized personal and private transport in favour of traveling by metro.

Metro & the Suburbanization process

An ASSOCHAM survey has found that during week days, over two lakh of car owning office goers who used to attend to their jobs commuting by their personal cars are now regularly traveling by the metro using their cars only to move from residences to the metro stations where they could park the cars. It saves them not only petrol expense in the context of rising petrol prices but also relieves them of the strain of driving to office and back during the peak hour traffic in the city. Several lakh office goers and businessmen, professionals, sales executives and itinerant salesmen, other workmen and women, who used to travel to work by buses, have also shifted to the metro or a combination of bus and metro. The metro itself provides bus services from its select stations to neighboring blocks which facilitates commuting further. The last ten years that saw the set up and growth of the Metro network have also resulted in

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accelerating the spread of sub cities and satellite towns like Gurgaon, NOIDA, Greater NOIDA, Ghaziabad etc. This is evident from the acceleration of construction activity in these satellite towns and the coming up of large office complexes that rival the best in the world as well as residential areas there. This spread relieves congestion in Central Delhi and enables more breathing space for the population of Delhi that has doubled from less than a crore to over 2.39 crores (23,900,000) ( as on Jan 1, 2011) within the last ten years. It has also enabled Delhi to stage international sports events like the Commonwealth Games without huge traffic hold ups and resulting tensions. ASSOCHAM and other surveys also report a new metro culture of clean, orderly metro transportation with citizens learning the discipline for the first time of keeping the premises free of spits and wastes. Visitors to Delhi have observed the contrast between the three major railway terminals on the one hand and the entire range of metro stations on the other in regard to cleanliness. The Metro authorities have encouraged commuters to keep the premises clean, employed staff for periodic cleaning every day and applied the stick of penalties in case of misuse.

Advantages of Metro
The easy access to the three major railway terminals in the city ( with three more coming up soon) over the metro has also meant comfortable and hassle free ride to these terminals to and fro from anywhere in the city. Consider for instance the congestion on the Pahargunj side of the New Delhi railway station and the problems to reach the terminals even from Rajiv Chowk or central New Delhi even though the distance is less than a km. Delhi municipal area alone in addition to its own population of over one crore, also attracts some 10 lakh visitors every day, people coming for business, sight seeing, interaction with central government agencies and for dozens of events daily. Delhi is a huge centre of wholesale as well as retail businesses, apart from being the seat of central and state government power. The total strength of motorized vehicles in Delhi between 2000-2010 was over 60 lakhs (2 & 4 wheelers). There is also a flood of similar vehicles coming into Delhi from neighboring towns every day. There would have been interminable traffic chaos if the metro lines had not drained the city roads of such ultra heavy loads of traffic. A second advantage of the metro is gradually getting projected. It becomes easier for low income groups and rural immigrants flocking to the cities and creating slums to be dispersed over to the new towns from where the metro could take them been strong resistance to such shifts and government has had to use force for effecting such dispersal leading to explosive law and order situation and avoidable human suffering. One of the many reasons for this resistance is that these slum dwellers who find jobs in various residential colonies, business

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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

centres and tea shops and as itinerant artisans and vendors cannot afford to spend the time and money to reach to their work places from the new locations as buses even if they are cheap (which they are not) cannot transport such large numbers that fast either. Metro should at least partly meet this need.

Delhi Metro: cost-benefit estimates

RITES estimated the cost of the Phase I of Delhi Metro at Rs. 6406 crores at 2004 prices with a foreign exchange content of Rs. 772 crores. For Phase II it was Rs. 8626 crores . Daily passenger footfall was estimated to be 12.63 lakhs in 2002 rising to 54.17 lakhs by 2011 ( for both phases combined). Revenue was to go up from Rs. 1505 crores in 2005 to Rs. 3376 crores by 2011 and Rs. 12,792 crores by 2030. The net benefit to government by this Metro was estimated for year 2011-12 as Rs.3176 crores. The net present economic benefit from the Delhi Metro (first two phases only) was estimated to be over 22 per cent and net present social benefit (NPSB) at 22.7 per cent as per 2004-05 prices. The financial rate of return would be 17 per cent. Social time preference might be computed as Rs. 4197 crores in money terms. Commenting on the rate of return at economic, financial and social level for the Metro investment, the Planning Commission is quoted as having remarked: These rates are much higher than the recommended social time preference rate of eight per cent and the 10 per cent rate of return for investment in India as per a recent study commissioned by the Planning Commission. In their study of Delhi Metro Murthy et al (Delhi School of Economics) has found that the benefits from reduction in urban air pollution in Delhi due to the Metro has further increased the rate of economic return to 23.9 per cent. This means the benefits to Delhi public from reduced air pollution due to the Metro increases its economic rate of return by 1.4 per cent. The study cited also concludes that Delhi Metro provides incremental income to Delhi public which has a per capita income more than two times the national per capita income. The multiple benefits of Metro could now be listed as it has now completed run of nine years. The study quoted above says that Delhi Metro contributes to the diversion of a very high proportion of current passenger traffic from road to Metro and serves part of the growing passenger traffic demand in Delhi. ASSOCHAMs own study finds that this diversion ( already over two lakh car owning commuters leave their vehicles at the Metro parking or ride bus to Metro station and prefer to use the rail for commuting to their work place) is just a beginning and is bound to accelerate once all the nodes in the Metro system are in place with the Phase III of the project. Our study shows that at present Metro lines are time consuming (comparatively) for many commuters: for instance, from the sub-city of Dwarka to central Delhi it takes one hour. The critical traffic nodes like Dhaula Kuan are going to be directly connected to Red Fort through Jan Path in central Delhi. This would encourage many in
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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

West and South-West Delhi to travel to central district or to the wholesale business centre of Chandni Chowk via Metro at more affordable rate. With Phase III of the project all parts of NCR would be interconnected and Metro travel would become the norm with buses and three wheelers confined to supplementary role. Then the full benefit of diversion of car/bus traffic to rail line would be felt and the passenger density would go up by several factors. The benefits would include a reduction in development cost of roads and in investment in buses for the government and private transport sector. However, this statement has to be qualified as government would have to invest in better and wider roads and in better type of buses like the low floor ones already being deployed on Delhis roads and on projects like four and six laning, flyovers at all critical cross points, cementing of roads ( as we have detailed in our study on Diesel pricing) and in laying cycle paths to encourage shift to a non-polluting and health improving life style. We find that it is not Rail versus Road in urban planning but both rail and road traffic to supplement each other with the maximisng of return from both through a synergy in their planning. For passenger car owners Metro could lead to much maintenance cost saving as the daily commuting would shift to the Metro; the availability of a round the clock Metro network alone would significantly reduce car demand and thereby less pollution. We should also list among the benefits less pollution due to fewer traffic jams and faster turn round of road taffic. Also counted among the benefits are: saving in travel time and health benefits due to the public traveling in airconditioned comfort. ASSOCHAM survey has observed an encouraging development on Metrol rail in Delhi as against road travel. The latter has a class segmentation with better off office goers and professionals traveling in cars and upper middle class people using airconditioned buses. In the Metro travel, all classes of Delhi citizens enjoy the same airconditioned luxury. Considering that travel in airconditioned buses cost more per km than non-AC travel, the Metro provides a level traveling field for all without any cost discrimination. The health aspects of such travel when you move in crowded areas, is another aspect. The arrival of the Metro pushes up land and property prices and rental returns. More people are attracted to buy up or rent property far from the working place because of ease of travel with the Metro arrival. The study quoted earlier notes that The metro has the effect of increasing the income of the regional economy of Delhi vis a vis the rest of the Indian economy. Our survey also found that there could be a substantial reduction in cars coming to Delhi daily from outlying towns as the Metro reaches those towns. In fact, high speed rail travel plans have already been laid for reaching out to growing cities around like Meerut, Sonepat, industrial town of Faridabad and tourist centre of Alwar connecting them to Delhi. This again would enhance Delhis value as a business centre. In ordinary circumstances these towns would not have come into the NCR area as there could be considerable time gap in reaching out

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to them as well as cost gap. The reduction in vehicles due to Metro Phase I and II has also been considerable: Year 2005-06 2010-11 2015-16 Cars and Jeeps 50586 10000 30000 Two Wheelers 284433 65000 150000 Buses 3398 4767 12388 Total 338417 79767 192388

It is obvious that the withdrawal of motorized vehicles due to Metro will be manifold as the rail travel catches on and network expands in future. It is also worth noting that a surge of those traveling earlier by scooters going for Metro is signaling Metros attraction to the urban middle class. RITES estimated in 2005 that the total reduction in CNG due to traffic of buses diverted to the Metro (Phase I and II) during the year 2011-12 would be 39.65 million kg. Similarly fuel saved due to the diverted traffic of cars and two-wheelers would be 138.35 and 25.70 million litres respectively. At 2004 prices that are just half of what they are today, the fuel savings work out to 1573 crores as per 2004 prices and Rs . 3146 crores. To this should be added the fuel savings due to the residual vehicles finding it easy to move around. ASSOCHAMs own estimate therefore is that the fuel savings now should work out to about Rs.20,000 crores annually in 2011-12 and rise progressively to over Rs. 25,000 crores by 2020 at the current prices. We take into account in this estimate the fact that the Metro would be moving into phase III completion by 2015 and that would further reduce the number of vehicles on the road, encourage more people getting to Delhi from outlying cities like Meerut to come by Metro rather than motorized vehicles and the population increase and car registration to arrive at this estimate. Again, the Metro benefit total should be higher as we estimate monetary value of pollution reduction. In 2011-12 due to Metro there is also reduction in air pollution load due to decongestion. Various estimates are available on this score, the acceptable figure of Rs. 1376 crores however is in 2004-05 prices; in current prices that figure could b e over Rs. 2500 crores. Murthy et al and RITES have estimated the time saving in different price levels- value of time per person saved at Rs. 5.96 per hour in one estimate and Rs. 7.91 per hr in another for buses and other vehicles. RITES estimate assuming the daily passenger load by bus at 3.3 million and by Metro at 3.2 million and average lead 0.21 hr and 0.31 hr respectively and value of it per passenger at Rs. 5.96 Metro value for time saved would be Rs. 5.91 million and for buses Rs. 4.13 million, clearly giving a lead for Metro rail travel. RITES estimate has put the money saved due to lesser number of road accidents at around Rs.50 crores. Operating costs saved for reduced use of vehicles is estimated to be Rs. 1504 crores in 2011-12. Apart from these general benefits to people and
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the economy of the city, the benefit to government in various forms like fare box revenues, property development revenues, advertisements and tax on goods and services bought for the Metro use, all add up to another Rs. 3176 crores in 2004 prices. Putting these and all other benefits together and reducing the loss to transporters of buses and other vehicles, the estimate of net present economic benefit at the lowest level comes up to Rs. 2100 crores in 2011-12 at 2004 prices. Some other estimates give a larger figure about 70 per cent more. It is interesting to note that Murthy et al have estimated net benefit to the public at Rs. 1426 crores at 2004 prices in 2011-12. Over the life cycle of the Metro investment NPEB using an 8 per cent discount is estimated at Rs. 43,238 crores; with discount rate at 10 per cent NPEB could be lower at Rs. 23,205 crores. Rate of Return on investment works out taking all benefits into account between 23.85 and 23.88 per cent which is encouraging and make this investment worthwhile. In addition, the Net Present Social Benefit of Metro for the income distributional effects are computed between Rs. 41997 and Rs. 21851 crores using two different approaches. This gives rate of return at between 22.70 and 22-60 percent. Adding air pollution reduction the economic rate of return is 23.9 per cent for Metro project as a whole.

Urbanization & connecting suburbs via Metro

By transforming the economics and sociology of urban spread the metro is seen to be showing a new direction in urban development in the country. For Mumbai that had for long had the benefit of surface run suburban rail system the call for a heavy investment in an underground metro in addition to the suburban rail system has come partly in the wake of the success of the metro in Delhi. Mumbai is constructing a network of 146 km in Mumbai city and suburbs and additional 300km in Mumbai region. The first Rs. 2356 Cr. metro rail corridor running from Verasova-Andheri-Ghatkopar is expected to be commissioned next year. One more line Charkop-Bandra-Mankhurd metro corridor has completed financial closure and construction is to begin soon. It is interesting to note that despite the existing suburban rail system and additional Rs. 5,000 crore multimodal urban transport project, quadrupling of rail lines from Virar to Borivili and additional 100-new suburban trains, the Mumbai MRDA has decided to invest as much as Rs. 50,000 crores plus for seven more metro corridors to reduce the congestion on the suburban rail lines and to accelerate mass transport connectivity in all two East-West, North-South directions in Indias number one metropolitan area and the nations commercial and financial capital. We could recall what Chennai is planning where Metro rail work began in 2008 with a Phase I budget of Rs. 11,000 crores. Kolkata metro was the first to come up in the country and is now being expanded. Metros are coming up in Bengaluru and Hyderabad and Kochi though is not in the category of 4 million population is demanding one. There is no more evidence needed to underline that Metro
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has emerged as the Number One means of mass transportation in the emerging urban landscape of the country. In developed countries the Metro is taken as normal and has already transformed the urban landscape for instance, in New York it has promoted suburban growth and dispersal with the majority of the metropolitan population preferring the more comfortable living conditions in suburban culture to the congestion of the city centre flats. The growth of the suburban cities and townships in the NCR seem to follow the same pattern. One striking symbol of this suburbanization is the citing of many new malls and even luxury hotels in the satellite townships of Gurgaon and NOIDA in preference to central New Delhi. Most commercial high rise buildings have also come up in these satellite towns where newly built both commercial and residential properties are creating high valuations. This enables private enterprise to be innovative in every respect in design and development of these commercial and residential spaces and in promoting retail businesses and entertainment places compared to the similar functional areas of central Delhi. This has virtually given rise to a new industry that could be termed as satellite town infrastructure that complements and enhances central city economy. There is also the reality to be considered that such large concentration of population in terms of multiples of million cannot be transported by buses without jamming all the main roads. Metro is thus a necessity for the future of urbanization of India as the country moves rapidly into the 21st centurys new economic structure with its industrial and service economy overshadowing the farming economy as the main driver of the gross domestic product as we shall see in the next few paras. In the perspective of the 21st century we have to accept urbanization as an inevitable consequence of the emergence of an industry and service driven economy. The tradition of 70 per cent of the people depending upon agriculture that contributes only 25 per cent of the GDP can only perpetuate large swaths of the population remaining at low level of incomes and well-being. Even now with only less than one-third of our population in urban areas, it generates over two-thirds of the countrys GDP and account for 90 per cent of government revenues. For many reasons including the fact that rural India cannot find adequate income generating jobs to the rising rural population of the country, migration of population to urban areas has been going on in the six decades since independence. This and industrialization in the hinterland areas has created new towns and swelled the existing cities to a unacceptable level of growth. As a result slums now account for one-fourth of all urban housing. In certain top metros like Mumbai almost half the population is estimated to live in slums or unauthorized colonies without any basic amenities mainly because these slums /unauthorized colonies are near their work spots or where unorganized jobs are available. The level of urbanization increased from 17.6 per cent in 1951 to 23.7 in 1981 and

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then to 27.8 per cent by 2001, as per the decennial census. Though this may appear not too huge, in terms of absolute numbers, by 2001 the urban population was 285 million which was larger than the urban population of all countries except Brazil, China, Indonesia, Russia and the United States. The data from the 2011 census would reveal how far this has swelled further. For comparison it is worth noting that the urban population of India in 1901 was a mere 20 million. The number of urban settlements in the same period rose from 1830 to 4378 per sq km. The addition between 1951 and 2001 was 70 million to the urban population. Economists interpret such urbanization as an index of the transformation from traditional rural economies to modern industrial ones. The transformation in the Indian economy has been straight into the services which now constitute over 50 per cent of the GDP content.

Summing Up
Demographic projections show that by 2030 the total urban population would be 590 million, out of which 40% would be urbanized population. This should increase by 2030 to 67 per cent reducing rural population to 31 per cent. Tamil Nadu (67%), Gujarat (66%), Maharashtra (58%), Karnataka (57%) and Punjab (52%) would have population far in excess of 50 per cent in urban areas. In Uttar Pradesh urbanization may be below 50 per cent but as much as 68 per cent of the population is likely to be in urban areas, denoting high level of urban chaos if mass transport is not planned early. The fast pace of urbanization projected in the last decade has now been confirmed by the latest census figures of 2011. This fast pace of urbanization also mean that almost 85 % of the tax revenue of government would be generated by these cities by 2030, already 80 per cent of the tax revenue is from urban areas the total tax revenue in 2008 was $170 billion which by 2030 would rise to $ 892 of which 85 per cent, which is urban India by 2030 would be adding $615 billion to the Governments kitty by that year. This could be a huge change agent in the Governments agenda and could also create huge socio-political problems for government if mass transportation and other urban problems are not attended to through proper planning with immediate effect.

Categorization of Cities & Metro Rail Expansion

The number of cities with a population of more than four million is called Mega-cities would go up from a mere 3 now to over 13 and Six cities crossing the mark of 10 million population and from 48 to 68 Million Plus Cities by 2030 respectively. The dynamics of transport in these cities would be such that if the townships do not have the space to spread the transport to office and back would choke the city roads. These dynamics say that if the density of population is only 10 per hectare any point in area of 100 hectares could be reached by 1000 people within 12 minutes of walking time without any motorized transport
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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

but if the density in 300, as many as thirty lakh people can reach the same spot within the same walking time which would naturally choke the area. So if this choking is to be avoided the spread of the urbanized area is essential. Imagine the urban chaos that would confront a government failing to plan for this sort of mega change when in 13 cities each with a population of above four million & six cities each with a population of above 10 million (Mega Cities) there would be huge demand for mass transport. Nothing can do this sufficiently as a metro rail system would do. Also the planning for the metro system for 6 mega cities (2030) (Mumbai, Delhi, Kolkata, Chennai, Bengaluru and Hyderabad) from now onwards could mean establishing a large metro equipment industry for the coming days. This would attract huge investments, create lakhs of jobs and render efficient services. Along with planning standardization of Metro equipment is also needed so that mass production of this equipment including coaches, signaling, station design etc could be set in motion now to gain economics of mass production. Of course, there are new developments in the urban rail transport like monorail, orbital systems etc which take off from the metro railway system. In fact, these subsidiary systems are being considered for speeding up transport within the satellite cities like Ghaziabad to Meerut on the east side and Gurgaon to Sona in the south side of Delhi. The comparative efficiency of these various rail systems would have to be studied. As these systems come up a pattern would emerge that would tend to optimize energy efficiency and fuel use in the entire metropolitan area as such. It is obvious that multi-modal transport has to be provided in the metropolitan or mega city area and optimal spread of the population should be achieved within the availability of land and other resources. This requires proper and early planning as we are on the threshold of a huge urban surge. It is better that such planning is attempted now rather than later to avoid social tensions, and pressures on the well being of the urbanizing India in the next 30 years. It is also plain that too high a population density and to that extent less moving space and living space for this population would tell on the health of the urban population and increase public health and medical costs in future. Studies in urban transport policy options show that there could not be an optimal population for a city, what is critical in such planning is the direction as future growth can be organized to make a city compact or dispersed way. As cities act as magnet for immigration from rural areas limiting population would be difficult but it would be possible to plan for the dispersal of his population using multi-modal transport while maintaining high level of efficiency of movement and feeling of comfort for each household.

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It is this development that has caught the imagination of several other metros and minimetros to demand and plan metro developments. The list of growing metro projects in major cities of the country reveals this critical importance of metro rail projects. A Central Government report has this list: A new metro project was taken up in Hyderabad for 71.16 km., at an estimated cost of Rs. 12,332 crores, besides the ongoing metro projects of Bangalore, Chennai, Kolkata (East-West Metro corridor) and Mumbai. In addition to the above, In principle approval has been given for stage-I of the Jaipur metro rail project, to be implemented by the State government from its own resources. We have seen already what is happening in the prime financial centre of the country in Mumbai with Metro project costing over Rs. 50,000 crores planned in addition to the extension of its existing huge network of suburban trains. Mumbai has already grown beyond even its last mile of suburban growth and has spilled over into Navi Mumbai and even upto Pune in the south and Vadodara-Surat in the north. In smaller metros like Kochi there is a growing demand for metro project that is now before the Central government authorities for sanction. This reveals countrywide recognition that metro project is central to urban growth in the years to come. The criticality of the metro was also accepted by the Government in amending the Metro Railway Act in 2009 giving legal cover to metro projects. The viability funding from Government would make most of the metro projects undertaken on PPP basis, a chance of succeeding in the next few years providing most of the mega-cities metro transportation for mass urban transport. In the context of urban growth in India over the next 30 years, these developments assume critical importance as they could redesign and refashion the entire urban landscape. It is in effect the only way the explosive urban growth expected in the next two decades could be contained and channeled. ASSOCHAM believes that the Government should move quickly to establish the Metro as the best mass transport means in urbanizing India as a policy. This would mean planning for metros in all major cities having a population of above four million, the projection of metro construction and facilitation of mass transport to create demand for more industries to serve this demand and many new services to be provided in metro premises and through its network of satellite bus services. The check points for a Mega Metro Mass Transport Vision would, according to ASSOCHAM, should consist of: 1. Creation of a mega metro network vision for 20 new million plus cities (from 48 to 68), 13 cities with 4 million plus population and 6 mega-cities with more than 10 million populations of which Mumbai and Delhi would be above 30 million by 2030.

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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

List of Cities:
Tier I= More than 4 Million (currently 7 cities, by 2030 13 cities) Tier II= Between 1 Million-4 Million (currently 48 cities, by 2030 will be 68) Tier III= Population less than 1 Million Thirteen cities each will have a population of above 4 million there would be demanding mass transport. These 13 cities crossing 4 million mark by 2030 are: Six cities will have 10 million plus population by 2030, and two out of them at 30 million plus.

Tier I: List of cities with more than 4 million population by 2030:

S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Cities Mumbai Delhi NCR Kolkata Chennai Bangalore Pune Hyderabad Ahmedabad Surat Jaipur Nagpur Kanpur Vadodara Population projection for 2030 33.0 25.9 22.9 11.0 10.1 10.0 9.8 8.4 7.4 5.4 5.2 4.2 4.2

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India will have 68 cities with population of more than 1 million by 2030, up from 48 as of January 1, 2011. These 48 urban agglomerations in India with a population of 1 million or more are:

List of Million plus cities as on Jan 1, 2011

S.No. City Population (January 1, 2011)

Tier I Cities
1 2 3 4 5 6 7 8 9 Delhi Mumbai Kolkata Chennai Bangalore Hyderabad Ahmedabad Pune Surat 23,900,000 23,300,000 16,600,000 8,900,000 8,000,000 7,700,000 6,100,000 4,950,000 4,375,000

Tier II Cities
10 11 12 13 14 15 16 17 18 19 20 21 22 23 Kanpur Jaipur Lucknow Nagpur Patna Jabalpur Bhilai Indore Vadodara Bhopal Coimbatore Ludhiana Agra Kochi 3,750,000 3,375,000 3,025,000 2,875,000 2,600,000 2,231,670 2,225,000 2,025,000 2,024,000 1,960,000 1,960,000 1,870,000 1,850,000 1,740,000

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24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

Nashik Asansol Meerut Visakhapatnam Bhubaneswar Chandigarh Varanasi Kolhapur Rajkot Jamshedpur Madurai Amritsar Dhanbad Allahabad Aurangabad Vijayawada Srinagar Solapur Ranchi Thiruvananthapuram Guwahati Jodhpur Tiruchirappalli Gwalior Kozhikode

1,740,000 1,720,000 1,720,000 1,720,000 1,710,000 1,670,000 1,550,000 1,540,000 1,460,000 1,450,000 1,400,000 1,390,000 1,380,000 1,310,000 1,290,000 1,280,000 1,260,000 1,200,000 1,190,000 1,130,000 1,120,000 1,110,000 1,070,000 1,060,000 1,020,000

2. The vision should include creation of a manufacturing base for metro products in the country. This would require standardization for equipment right at start. 3. Creation of a funding mechanism and a special fund from out of the Government share of profits, taxes from the projects related to the metro. Government to provide Virtual

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Urbanizing India & Mega Metro Network Vision for the emerging Cities of India-2030

Security Guard (VSG) for firms undertaking advanced planning and execution of metro projects through this fund. 4. The optimal population of the emerging metropolitan areas must be fixed in the vision and steps should be taken to ensure that satellite towns come up with all facilities to encourage dispersal of urban communities. 5. Metropolitan Transport Authorities be created for each emerging metro township.

6. In 2008, urban GDP accounted for 58% of the overall GDP By the year 2030 it is projected . that the cities will account for 69% of GDP whereas the rural contribution would be around 31%. There would be critical political impact of this urbanization which should be studied in advance by all political parties and academic institutions. 7. The urbanization process will attract MNCs and services sector such as hotel & hospitality, infrastructure development, sanitation etc. 8. It will help India to be seated at the table of the developed nations.

We are sure with these steps and proper implementation the metro projects, urban India will take off much before the target date of 2030 with urban transport growing into a major driver of our economy while moderating the impact of mass demand for speedy metropolitan transport because of advanced planning.

HHH

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NOTES

About ASSOCHAM
ASSOCHAM acknowledged as Knowledge Chamber of India has emerged as a forceful, pro-active, effective and forward looking institution playing its role as a catalyst between the Government and Industry. ASSOCHAM established in 1920 and has been successful in influencing the Government in shaping Indias economic, trade, fiscal and social policies which will be of benefit to the trade and industry. ASSOCHAM renders its services to over 3,50,000 members which includes multinational companies, Indias top corporates, medium and small scale units and Associations representing all the sectors of Industry. ASSOCHAM is also known as a Chamber of Chambers representing the interest of more than 350 Chambers & Trade Associations from all over India encompassing all sectors. ASSOCHAM has over 100 National Committees covering the entire gamut of economic activities in India. It has been especially acknowledged as a significant voice of Indian industry in the field of Corporate Social Responsibility, Environment & Safety, Corporate Governance, Information Technology, Agriculture, Nanotechnology, Biotechnology, Pharmaceuticals, Telecom, Banking & Finance, Company Law, Corporate Finance, Economic and International Affairs, Tourism, Civil Aviation, Infrastructure, Energy & Power, Education, Legal Reforms, Real Estate, Rural Development etc. The Chamber has its international offices in China, Sharjah, Moscow, UK and USA. ASSOCHAM has also signed MoU partnership with Business Chambers in more than 45 countries.

The Associated Chambers of Commerce and Industry of India

ASSOCHAM Corporate Office 1, Community Centre, Zamrudpur, Kailash Colony, New Delhi-110048 Tel: 011 46550555 (Hunting Line) | Fax: 011 46536481/82, 46536498 Email: assocham@nic.in | Website: www.assocham.org

ASSOCHAM REGIONAL OFFICES

ASSOCHAM SOUTHERN REGIONAL OFFICE # 3524, First Floor, 17th Main Service Road, HAL 2nd Stage Indiranagar, Bangalore - 560 008 Mobile: +91-9035263457 Landline: +91-80-40943251-53, Fax: +91-80-41256629 E-mail: events.south@assocham.com, events@assocham.com director.south@assocham.com

ASSOCHAM WESTERN REGIONAL OFFICE 4th Floor, Heritage Tower, B/h, Visnagar Bank, Ashram Road, Usmanpura, Ahmedabad - 380 014 Tel: + 91-79- 2754 1728 / 29, 2754 1867 Fax: + 91-79-30006352 Email: assocham.ahd1@assocham.com, assocham.ahd2@assocham.com akshay.gujchap@assocham.com

ASSOCHAM EASTERN REGIONAL OFFICE 88A, 3rd Floor, Sarat Bose Road, Kolkata - 700026 Tel: +91-33-66141600/1601 Fax: +91-33-66141601 E-mail: kolkata@assocham.com

The Associated Chambers of Commerce and Industry of India

ASSOCHAM Corporate Office: 1, Community Centre, Zamrudpur, Kailash Colony, New Delhi-110048 Tel: 011 46550555 (Hunting Line) | Fax: 011 46536481/82, 46536498 Email: assocham@nic.in | Website: www.assocham.org